1. Field of the Invention
The present invention generally relates to methods for making credit card purchases of everyday transit fares and collecting individual fare payments by a mass transit operator over a predetermined period and submitting an aggregated authorization and settlement request at the end of the pre-defined period (e.g., a day or a number of days). The invention also relates to methods for dynamically obtaining credit card numbers at the time of payment submission, so that credit cards numbers are not stored locally at the mass transit operator's site.
2. Related Art
Regular commuters as well as infrequent mass transit riders would like the convenience of not requiring a separate payment device for paying transit fares. Particularly in today's “plastic economy”, riders are as anxious to use their credit cards to make instant fare payments as with any other category of purchase. Attempts to use a credit card directly for payment of one-time, sporadic, or regular mass transit fares, however, have not been successful due to various obstacles and incompatibilities.
Specifically, single ride transit fare payments cannot be authorized individually by a credit card issuer in a mass transit environment, i.e., at the time that the passenger enters the transit location or boards a particular mode of transportation. The rapid response time required for processing payment information when entering and/or exiting mass transit gates, typically 90-300 milliseconds, is too short to complete a traditional transaction instrument payment, such as a debit or credit card transaction, that requires authentication and approval of the payment device. Consequently, the excessive transaction wait time has, until now, made the payment of mass transit fares with a conventional credit card impractical.
At the same time, mass transit fares are low value purchases (typically $2-$3), making the processing of individual transactions a highly unprofitable venture for any credit card issuer.
One solution would be to store credit card numbers on a central computer of the mass transit operator. However, when credit card numbers are stored on a merchant system (for example on a local disk), this information is then susceptible to hacking and distribution of active credit card numbers for fraudulent use. Many incidents of this nature have been reported, which make it necessary for the credit card organization to cancel the compromised credit cards numbers and issue new cards to the affected cardmembers.
Another conventional solution to this problem is to have the customer load value on a card to be used for mass transit payment. Here, mass transit users may pre-load money value on a “pre-paid” fare card, and the value is reduced for each trip the user takes. Users need to track the residual value on the card and “top it up” when the value drops below the price of a trip. The value loaded is recorded by the mass transit operator's system, and a fare is deducted each time the customer enters or leaves the transit system. With stored value mass transit cards, users may use credit cards to, at most, either load a lump-sum value on the mass transit payment card or purchase “time ticket” cards for a prepaid daily, weekly, monthly, or yearly duration.
Other conventional approaches to linking different types of financial transaction instruments with stored-value mass transit fare cards are known in the art. One such implementation is the Octopus Card, which is a rechargeable, contactless stored-value card for paying fares on Hong Kong's public transportation system and is accepted for retail purchases at various stores and restaurants throughout the city. For retail purchases, electronic cash is deducted from the remaining balance on the Card. Then, for mass transit operation, the Octopus Card utilizes Sony® Corporation's FeliCa proprietary contactless radio frequency identification (RFID) technology, comprising a 13.56 MHz chip that enables fare deduction from value stored on the card, allowing contactless entry into the public transportation system. However, the Octopus Card suffers from the shortcomings associated with stored-value payment instruments. Since value is deducted from the Octopus Card with each ride on the transit system, a user must constantly be aware of the balance remaining on their card at any given time. Consequently, the need periodically to refill money onto the card inevitably slows users' commute.
Related to the Octopus Card is the Suica® Card, currently in circulation on the East Japan Railing Company (JR East) throughout parts of Japan. The Suica® Card (“Super Urban Intelligent CArd”) likewise employs Sony's® proprietary FeliCa radio frequency identification technology to provide contactless entry into JR East railway lines, in place of conventional magnetic strip fare cards. Yet, as with the Octopus Card, Suica® too is merely a stored-value card again requiring users to periodically add value to their cards.
Another conventional example of a mass transit fare “smart card” linked to a financial transaction instrument is the Platinum Select® SmarTrip® MasterCard®, combining the Washington Metropolitan Area Transit Authority's (WMATA) SmarTrip® fare card with Citi®'s credit card. This transaction instrument allows users to make retail purchases at stores, restaurants and services with the credit card function, in addition to riding the mass transit system operated by WMATA, including rail and bus service throughout the Washington, D.C. area. However, with this combined credit card/smart card, the mass transit and financial transaction functions are operationally distinct, though incorporated within a common payment device. Specifically, while operating as a credit card for ordinary retail purchases, the Citi® Card only stores up to $300 in WMATA transit value, and this stored value must be periodically reloaded at a mass transit station. Accordingly, although this device presents a step above conventional stored-value cards in that it provides the functionality of a credit card, the Citi® Card nonetheless fails to alleviate the burden of having to periodically refill the limited mass transit value.
Given the foregoing, what is needed is a system, method and computer program product for enabling payment of transit system fees using a financial transaction instrument. Specifically, there exists a need for enabling use of a credit card to make mass transit fee payments to eliminate periodic refilling of value onto mass transit fare cards. There is also a need for a transaction instrument that combines the ease of RFID technology with the convenience of credit card transactions as with ExpressPay™ for mass transit payment. There is also a need to overcome the impracticality of conducting a conventional credit card transaction for every ride on a mass transit system. Further still, there is a need to settle financial transactions without storing users' primary account numbers locally on merchant systems.